Chapter 7 - Assignment Essays

question

An economy is enlarging its stock of capital goods:

answer

When gross investment exceeds replacement investment.

question

GDP is the

answer

Monetary value of all final goods and services produced within the borders of a nation in a particular year.

question

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that:

answer

Net investment is negative.

question

Which of the following is an intermediate good?

answer

The purchase of baseball uniforms by a professional baseball team.

question

If the economy adds to its inventory of goods during some year:

answer

This amount should be included in calculating that year's GDP.

question

In national income accounting, the consumption category of expenditures includes purchases of:

answer

Automobiles for personal use but not houses.

question

The smallest component of aggregate spending in the United States is:

answer

Net exports

question

A nation's gross domestic product (GDP):

answer

Is the dollar value of all final output produced within the borders of the nation during a specific period of time.

question

If depreciation exceeds gross investment:

answer

the economy's stock of capital is shrinking.

question

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

answer

Increased by $65 billion.

question

The concept of net domestic investment refers to:

answer

Total investment less the amount of investment goods used up in producing the year's output.

question

Which of the following transactions would be included in GDP?

answer

Peter buys a newly constructed house.

question

A nation's gross domestic product (GDP):

answer

can be found by summing C + Ig + G + Xn.

question

The value of U.S. imports is:

answer

Subtracted from exports when calculating GDP because imports do not constitute production in the United States.

question

The largest component of total expenditures in the United States is:

answer

Consumption

question

Which of the following is not economic investment?

answer

The purchase of 100 shares of AT&T by a retired business executive.

question

National income accountants define investment to include:

answer

Any increase in business inventories.

question

If intermediate goods and services were included in GDP:

answer

The GDP would be overstated

question

Which of the following is a final good or service?

answer

A haircut purchased by a father for his 12 year-old son.

question

Government purchases include government spending on:

answer

government consumption goods and public capital goods.

question

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is:

answer

210 Billion

question

In the treatment of U.S. exports and imports, national income accountants:

answer

Add exports, but subtract imports, in calculating GDP.

question

Net exports are

answer

exports less imports

1 of 23

question

An economy is enlarging its stock of capital goods:

answer

When gross investment exceeds replacement investment.

question

GDP is the

answer

Monetary value of all final goods and services produced within the borders of a nation in a particular year.

question

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that:

answer

Net investment is negative.

question

Which of the following is an intermediate good?

answer

The purchase of baseball uniforms by a professional baseball team.

question

If the economy adds to its inventory of goods during some year:

answer

This amount should be included in calculating that year's GDP.

question

In national income accounting, the consumption category of expenditures includes purchases of:

answer

Automobiles for personal use but not houses.

question

The smallest component of aggregate spending in the United States is:

answer

Net exports

question

A nation's gross domestic product (GDP):

answer

Is the dollar value of all final output produced within the borders of the nation during a specific period of time.

question

If depreciation exceeds gross investment:

answer

the economy's stock of capital is shrinking.

question

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

answer

Increased by $65 billion.

question

The concept of net domestic investment refers to:

answer

Total investment less the amount of investment goods used up in producing the year's output.

question

Which of the following transactions would be included in GDP?

answer

Peter buys a newly constructed house.

question

A nation's gross domestic product (GDP):

answer

can be found by summing C + Ig + G + Xn.

question

The value of U.S. imports is:

answer

Subtracted from exports when calculating GDP because imports do not constitute production in the United States.

question

The largest component of total expenditures in the United States is:

answer

Consumption

question

Which of the following is not economic investment?

answer

The purchase of 100 shares of AT&T by a retired business executive.

question

National income accountants define investment to include:

answer

Any increase in business inventories.

question

If intermediate goods and services were included in GDP:

answer

The GDP would be overstated

question

Which of the following is a final good or service?

answer

A haircut purchased by a father for his 12 year-old son.

question

Government purchases include government spending on:

answer

government consumption goods and public capital goods.

question

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is:

answer

210 Billion

question

In the treatment of U.S. exports and imports, national income accountants:

answer

Add exports, but subtract imports, in calculating GDP.

question

Net exports are

answer

exports less imports

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